Commodity Carrier Rates Plunge as Glut Overwhelms Cargo Supply

Aug. 6 (Bloomberg) -- Daily rates for Panamax vessels, that
typically haul coal and grains, plunged to the lowest in more
than eight weeks as a glut of ships swamps the number of cargoes
available for loading.

Returns for Panamaxes, the largest size able to navigate
the Panama Canal, lost 2.2 percent, sliding to $7,096 a day, the
lowest level since June 7, according to the Baltic Exchange, the
London-based publisher of freight rates. That’s the 14th
consecutive decline, the longest losing streak since early
February, the data show.

The number of Panamax vessels in the global fleet has
increased to 2,105, the highest since at least February 2005,
according to data from IHS Inc., an Englewood, Colorado-based
research company. Charterers are able to select ships that offer
cheaper rates, as there is a large surplus of vessels
available, according to Fotis Giannakoulis, a New York-based
analyst at Morgan Stanley, citing data from Clarkson Plc, the
world’s largest shipbroker.

Charterers “are generally in no rush to fix as they see a
long list of tonnage,” Giannakoulis said in the report.
“Unless we see a sudden injection of fresh business today rates
look set to continue their downward spiral in the Pacific.”

Capesizes, the largest ships hauling steel-making
ingredients including iron-ore, added 1.6 percent to $4,417 a
day, according to the exchange. That’s the second increase after
an 18-day losing streak, the data show. Earnings for Supramaxes
declined 1.3 percent to $10,269, and Handysizes decreased 1.3
percent to $7,930 a day.